Export Controls

Export Compliance Overview

Introduction

Government agencies have significantly increased their enforcement of export control compliance to include universities and research institutions. Compliance audits by the agencies as well as requirements such as the I-129 Visa Petition Certification further elevate enforcement visibility. SIUE as an institution as well as individual PIs and administrators can be held liable for export control violations, with severe monetary penalties and sanctions including loss of export privileges resulting from non-compliance.

This Overview is intended to provide SIUE personnel with a concise summary of how Export Control regulations affect research activities, international collaborations, and export-related transactions at the University. It provides links to key sections of the regulations and SIUE procedures addressing the types of items that the government controls. There are links to contacts for assistance on these matters. All research and administrative staff are encouraged to read this Overview and use it as an ongoing resource for complying with export controls.

(2) By “release” or disclosure: visual and computer access to export controlled items, technology or technical data (hard or soft copy), occurring in the U.S by foreign persons of certain countries validly here on temporary student or employment visas, but who are neither U.S. citizens nor Permanent Residents; the export is “deemed” to occur upon the foreign national’s return to his/her home country. The definition of “foreign persons” includes companies not incorporated in the U.S., foreign governments, and international organizations.

** For purposes of both (1) and (2) above, technical data is defined as follows: blueprints, plans, diagrams, models, formulae, tables, engineering designs, and specifications, manuals and instructions written or recorded on other media or devices such as disk, tape read-only memories; and oral communication about any data contained therein.

The export control regulations govern what laboratory instruments, equipment, materials, software, technology and technical data can be transferred out of the country by any means (e.g. cargo shipment, hand-carried laptop content, courier, email, and spoken communication) as well as what can be accessed by foreign nationals present at our laboratories for whom certain export restrictions apply. In certain cases, these situations require prior authorization (an export license) from one of the applicable governing agencies. These agencies include the Departments of Commerce, State, Treasury, Defense, Energy, and the Nuclear Regulatory Commission.

While the vast majority of research and business activities that we conduct at SIUE are restriction-free, the significant increase in the level of agency export enforcement with respect to major research institutions such as SIUE requires that we ensure full compliance with these regulations, particularly where export license requirements or technology controls apply.

Failure to adhere to these regulations can result in severe monetary penalties, revocation of export privileges, debarment from federal funding, and civil or criminal enforcement against both SIUE and/or the individual PI to whom a violation is attributed. This heightened enforcement is further evident in the new H1/O Visa Petition Certification requirement, requiring SIUE to certify whether H1 or O visa beneficiaries will require an export license to access export controlled technical data in the course of their research responsibilities within our laboratories.

Export Control Regulations

Export controls are implemented through five regulatory regimes, as follows:

(1) Export Administration Regulations (EAR): These are the Commerce Department’s “dual-use” controls under Title 15 CFR 700-799 governing hardware, materials, equipment, software, technology and technical data that Commerce defines as “dual use” i.e., having civilian and inherent military or defense application. Commerce places destination (country) and end-use/user-based controls by requiring prior authorization (license) prior to export. Not all items on the Commerce Control List (CCL) are controlled for all countries. For example, the type of control such as “National Security,” “Nuclear Proliferation,” or “Biological/Chemical” (among other types controls), determines what types of items are controlled for particular countries and end uses based on the items specifications, capability and use.

(2) International Traffic in Arms Regulations (ITAR): These are the State Department’s defense-based controls under Title 22 CFR 120-129 governing defense articles and activities. Defense articles are defined generally as hardware,materials, equipment, software, technology and technical data specifically designed or modified for defense or military application, without a civil performance or use equivalent. The ITAR governs many types of commercially available items built to military specifications commonly used in research activities, including but not limited to the Engineering, Biological, Information, and Space sciences. Unlike the EAR’s dual-use universe, exports of ITAR items are subject to licensing regardless of destination or end user/use, unless a specific license exception is met. In other words, all destinations potentially require licenses. And further, unlike the EAR, certain countries, such as China, are per se prohibited destinations under ITAR: no licenses will be issued.

In addition, the ITAR also regulates a category of activities defined as “defense services.” Essentially these are activities which either involve disclosing ITAR technical data to foreign nationals (or data related to a defense article) even in the pursuit of fundamental research; or disclosing any technical data (including that which is not-controlled, dual use controlled or already in the public domain) to a foreign national or related organization affiliated with a military purpose. Activity that meets one or more of these definitions likewise triggers a licensing requirement.

(3) Office of Foreign Assets Controls (OFAC): These are the Treasury Department’s economic embargo controls under Title 31 CFR 500-598 governing which types of transactions are restricted with certain countries which OFAC defines as terrorist-sponsoring nations. Exports constitute only one of many types of restricted transactions which OFAC defines as providing a restricted service. While OFAC maintains economic embargoes with numerous countries, the only countries that directly impact exports (outbound and laboratory access) for our purposes are Cuba, Iran, Syria, N. Korea and Sudan. Similar to the EAR and ITAR, transactions with these countries require licenses, which may or may not be authorized depending on the country and nature of transaction.

How Do These Regulations Specifically Impact SIUE’s Research Activities?

Research at SIUE is primarily but not exclusively non-restricted. Non-restricted research is covered under the Fundamental Research Exclusion (“FRE”). The FRE allows foreign national researchers at the University to access EAR-controlled items and data for purposes of basic and applied research, the results of which are intended for publication and broad dissemination within the scientific community. However, some fundamental research is informed by “background information” which is export controlled and must be protected. Non-research activities at the University, as well as the limited segment of restricted research, are not protected by the FRE. Thus, the following activities must always be evaluated for export control purposes:

1) Research activities subject to publication restrictions.

2) Outbound shipments to foreign destinations require analysis under the five regulatory regimes to determine whether an authorization is required.

3) Laboratory access to controlled equipment and technical data that does not fall under the FRE must be restricted to authorized personnel.

4) International collaborations may not involve prohibited parties and must be screened accordingly against the restricted parties lists.

8) Research activities not covered by the FRE need to be evaluated for export compliance purposes.

9) For fabrication contracts and spin-off entities (i.e. where an SIUE PI or administrator has created a separately chartered company to perform services unrelated to his/her staff position at SIUE), it is necessary to ensure that any export controlled activity conducted by the spin-off does not occur using SIUE physical or human resources. Such entities must seek separate counsel pertaining to export control compliance obligations.

10) For private consulting or advisory services, where a PI’s private consulting arrangement triggers export controls, compliance with these controls remains the legal responsibility of the PI in his/her private capacity, and is not SIUE’s responsibility.

1) Publication Restrictions

While most of its research is unrestricted, SIUE may obtain funding with publication restrictions. These projects do not enjoy the protective harbor of the fundamental research exception so specific security plans, export control reviews, export control licenses for personnel exposed to the technology, and continual close monitoring may be required after a thorough review by the SIUE Export Control Administrator. Mistakes in the dissemination of information in publication-restricted projects may lead to deemed export violations, which may result in personal jail time and substantial personal fines. In fact, SIUE would be required to immediately report any such deemed export violation to the Federal Bureau of Investigation and the Department of Commerce Office of Export Enforcement, among others.

Anyone working on a publication-restricted project should be aware of the large number of constraints on releasing information. All such information released should have the explicit written approval of the SIUE Export Control Administrator. They should also be cautious about providing gratuitous information and careful to guard against premature release of such potentially export controlled information as rapid advances or breakthroughs in technology. A violation of these precepts represents noncompliance with SIUE policies and may have serious repercussions.

Because a license can take at least 30 days to obtain, it is critical to address a potential export requirement as soon as possible to allow for sufficient processing time. The type of license, scope and duration will depend on which authorizing agency (Commerce, State, or Treasury) has jurisdiction over the license application or authorization. This rule applies even where the purpose of exporting the item is to advance fundamental research abroad, for example, as part of field work to be conducted in another country or to facilitate an international collaboration.

It is important to note that even where an item (commodity) is created in the University from commercially available components and data, or through technical know-how that is publicly available, the item itself may still require a license to export.

3) Laboratory access to equipment and technical data

The rules governing access to controlled equipment and data vary depending on whether the access is covered under the EAR or ITAR, as follows:

Dual-use (EAR-governed) inventory and technical data

Click here to access Parts 730 to Part 774 of the Export Administration Regulations in the Electronic Code of Federal Regulations. Scroll to Part 774 for a complete digest and list of major headings:

Fundamental Research Exclusion (FRE): Where we are conducting fundamental research (defined as basic and applied research, the results of which are meant to be shared broadly with the scientific community and intended for publication, access to dual-use laboratory equipment and technical data remains unrestricted, subject to exceptions. These exceptions are as follows:

Exception 1: Where a PI has received proprietary technology or source code (“data”) from a sponsor (federal or industrial) as background information or a research tool by which to conduct fundamental research, and this data is export controlled, then access to this data falls outside the FRE: the PI (likely a U.S. person as required by the NDA through which the data is received) is responsible for not sharing it with foreign national members of the research team. Where it is recognized as necessary to share such data and this is contemplated by the NDA, a deemed export license may be required in order for the foreign national to access the data.

Exception 2: Where the proprietary technology specifically concerns technology for the development of advanced cryptography or source code containing advanced cryptography, then a deemed export license will be required prior to access by foreign nationals from Iran, Cuba, Syria, North Korea, and Sudan. SIUE’s Export Control Administrator can assist in determining what qualifies as advanced cryptography for this exception. Again, please note that such technology if self-invented at SIUE does not require a license for access by this category of foreign nationals, assuming the technology or code is intended for publication.

Exception 3: Where SIUE rents or otherwise hosts laboratory space to external or third party users for their own proprietary, commercial purposes and not to conduct the fundamental research, the FRE does not apply to that party’s access to controlled equipment and process technology. In this case, SIUE must determine whether a deemed export license is required.

Exception 4: Fabrication or contract service work for an industry or federal agency partner. Where SIUE conducts fabrication and contract service work outside of fundamental research, the FRE does not apply. In this case, SIUE must determine whether a deemed export license is required. See also ﻿“How Do These Regulations Specifically Impact SIUE’s Research Activities?” pertaining to spin-off entities and consulting relationships.

Like the EAR, the ITAR recognizes fundamental research subject to the same framework of not accepting publication or citizenship restrictions, and requiring that all research be intended for the “public domain.” Hence, acceptance of any citizenship or publication restriction by a sponsor automatically triggers ITAR disclosure restrictions to research results classified as ITAR. Again, SIUE does not usually accept restricted funding from a government or industry sponsor (and regardless of whether SIUE is a prime or subcontractor), and most—but not all—of its research results are intended for the public domain.

However, even where no restrictions are accepted from a sponsor as to the dissemination of research results, ITAR controls still apply to any ITAR item or data that SIUE receives either from the sponsor or a collaborating institution, or procures commercially for purposes of conducting the research. Whereas the FRE (with only certain exceptions) allows access to equipment and data used during the course of fundamental research by foreign national faculty and researchers, ITAR restricts access to equipment and data where using it in any capacity discloses the inherent design, operation, or know-how that renders it ITAR controlled.

In this case, where a PI wants to provide access to a foreign national researcher of ITAR controlled commodity, equipment or data, either SIUE will have to obtain an export license prior to access, or the PI will need to create a Technology Control Plan (TCP) to secure the item. The TCP is used to allow physical access to a commodity or virtual or physical access to technical data only to U.S. persons. The only exception to this rule is the situation where the foreign researcher qualifies as a full time SIUE employee and where certain other regulatory criteria are met. Even were this exception met, the foreign researcher cannot transfer the ITAR-controlled data to any other foreign national on the research team.

As noted, separate from the restrictive access provisions under the ITAR, ITAR also requires licensing of foreign nationals when the research activity constitutes a “defense service” as defined above.

4) OFAC-governed transactions

OFAC does not per se regulate access to specific laboratory equipment, technical data and research results the way that the EAR and ITAR do. Rather, OFAC regulates transactions involving certain restricted countries and, to the extent that such transactions require activity within SIUE’s laboratories, these activities fall under OFAC’s domain. For example, research collaboration with an institution in Iran requiring laboratory research at SIUE may require a license, even if only data and no commodity were being transferred to Iran. Transferring any research materials to the OFAC-restricted countries or importing any item from them may likewise require a license. Providing editorial comment directly to a foreign national located in one of the OFAC restricted countries as part of a journal or peer review requires review on a case-by-case basis.

However, this restriction should be distinguished from those situations where research results are made publicly available by posting them on the internet or through a professional website that anyone can access. In that case, the fact that an Iranian researcher or institution downloads the item does not constitute an OFAC violation. However, at the point at which the Iranian institution seeks specific guidance from SIUE pertaining to publicly available information or seeks technical assistance of any kind, this activity may trigger a license requirement.

Note also that SIUE engages in licensed academic exchanges with Cuba through SIUE’s Cuban and Caribbean Center. Where academic and potential research activity in Cuba is proposed, these activities should be evaluated through the Cuban and Caribbean Center for compliance with licensing and reporting requirements.

Fundamental Research Exclusion (FRE)

By definition, fundamental research means that no publication or citizenship restrictions are accepted from any sponsor (industry or government agency) by any means (prime contract or flow-down), explicitly or unofficially. A publication restriction is one in which a sponsor requires withholding of research results for any reason other than a) to make sure that no proprietary data provided to the PI is disclosed in the published research results or; b) the time necessary to file a patent application. A sponsor’s general requirement that publication be withheld “pending review” or review for a period of time beyond what is reasonably required to filter out proprietary data would constitute a publication restriction and disqualify the project from FRE protection. A citizenship restriction limits research participation to U.S. persons or reserves the right to determine which researchers, by nationality, can participate in the project.

Publication

Information becomes "published" or considered as "ordinarily published" when it is generally accessible to the interested public through a variety of ways. This includes publication in periodicals, books, print, electronic or any other media available for general distribution to any member of the public or to those that would be interested in the material in a scientific or engineering discipline. Published or ordinarily published material also includes the following: readily available at libraries open to the public; issued patents; and releases at an open conference, meeting, seminar, trade show, or other open gathering. A conference is considered "open" if all technically qualified members of the public are eligible to attend and attendees are permitted to take notes or otherwise make a personal record (but not necessarily a recording) of the proceedings and presentations.